Mantra Crash and Altcoin Risks
A few days ago, the token of the Mantra project — $OM — crashed 10x in just a couple of hours. Notably, this wasn’t some low-liquidity shitcoin, but a top-30 asset by market cap.
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🕵️♂️ Who and How Crashed $OM
- After the $OM crash, the project team stated on Twitter that the drop was caused by reckless liquidations and had nothing to do with the project or the team.
- Onchain analysts claim that over $200 million worth of $OM tokens were transferred to exchanges right before the crash — enough to enable this type of market manipulation.
- The fund Laser Digital was suspected of being behind the dump but they publicly denied the allegations.
- Crypto detective ZachXBT believes the founders of Reef Finance (https://x.com/denkomancheski) might be involved. Right before the $OM collapse, they were reportedly seeking large loans backed by $OM.
🔴 There are many opinions, but the bottom line is this — large sell-offs triggered liquidations, leading to a panic-driven sell-off among retail investors.
💀 Consequences
- Mantra’s market cap dropped from $6 billion to $600 million
- Over $60 million worth of $OM positions were liquidated in just a few hours
- Retail investor holdings in $OM shrank 10x
- Trust in Mantra, the RWA sector, and altcoins in general has been shaken
🤔Can This Happen to Other Tokens?
- Shortly after the $OM crash, something similar happened to $IP (Story Protocol token), which dropped more than 30% in hours without any clear reason
- There are unconfirmed rumors that $IP, $MOVE, and $LAYER tokens are being sold at a discount on the OTC market
- $IP price recovered quickly, but such volatile moves without news are very unusual for a token with over $1 billion market cap and $4 billion FDV
Commentary
While comparing $OM and $IP directly may be inaccurate — as the causes and nature of the moves might differ — the main point is this: inflated FDVs and market caps don’t necessarily mean a token is safe. Even top-100 coins can crash by 30–90% without any real news.
⚠️Warnings
- A high market cap altcoin is still an altcoin — and comes with significant risk
- If you invest in altcoins, you must be ready for a total loss
- Trading futures and trying to “catch the dip” during such manipulations is like gambling — odds of losing are higher than winning
